NEW YORK (Reuters) - Omega Advisors, one of this year’s best-performing hedge funds, is preparing to see less robust corporate earnings next year, Steven Einhorn, the firm’s vice chairman, said on Wednesday.

“We expect earnings will be disappointing to consensus in 2013,” Einhorn said at the Reuters Investment Outlook 2013 Summit.

But he holds out hope for the stock market to perform well all the same if the politicians can hammer out what he calls a “grand fiscal bargain” in the first six months of 2013 with some $3 trillion in deficit reduction over the next years, split between spending cuts and tax revenue increases.

Omega Advisors, which oversees $7 billion in assets, has been among the year’s standouts with double-digit returns at a time when the average hedge fund is up only in the low single digits. Bets on Apple (AAPL.O) and Sprint (S.N) have paid off handsomely for the fund, founded by Leon Cooperman in 1991.

The firm’s $1.4 billion Overseas Partners fund, run by Cooperman, was up 22.2 percent at the end of October.

The reason for his more guarded outlook is a combination of softer revenue growth and profit margins reverting to the mean, Einhorn said. “Those two things will be headwinds,” he said at the Reuters Summit in New York.

“Year-over-year revenue growth in the third quarter was about 1 or 2 percent. It may accelerate a bit next year but it will not be robust certainly,” Einhorn said.

“Second and more important, profit margins for the S&P companies are several hundred basis points above trend and profit margins are mean-reverting, not immediately but over time,” Einhorn said.

His personal forecast for operating earnings for the S&P 500 is $103, below the market’s consensus range between $108 and $113.

But Einhorn holds out hope that stocks can do well again particularly if a grand fiscal bargain is reached.

“If we get the grand bargain that I’ve described, returns in the S&P next year will be respectable,” he said, adding that they could be in the high single digits or the low double digits.

“The point is they will be respectable relative to inflation and certainly respectable relative to interest rates or returns on fixed income, which are at best abysmal. So in that sense the equity market will do I think quite well, if you get the grand design.”

Einhorn said that the firm is holding slightly more cash now, having taken some money off the table a few weeks ago, amid the uncertainty about how the country will resolve its fiscal problems.

In a wide-ranging discussion about stocks and what might give them a lift, Einhorn also revealed his personal top choices for Treasury Secretary after Tim Geithner leaves the Obama Administration.

“If you ask who I’d like to see, those two would be terrific. And if either one were appointed Treasury Secretary, it would be worth something to the S&P 500,” he said.

Another Summit speaker, Bonnie Baha, a senior portfolio manager at DoubleLine Capital in Los Angeles, also praised Dimon, for his “ability to communicate ideas.” She said that the startling $6.2 billion trading loss that triggered a Congressional investigation was “barely a blip” for the bank over the long haul.